Lyft co-founder talks earnings, layoffs, and competition with Uber

🎥 Nov 08, 2022 📺 Yahoo Finance ⏱ 7m 👁 3039 views

Lyft Co-Founder John Zimmer joins Yahoo Finance Live to discuss the company's latest quarterly earnings, the sell-off in the stock, the outlook for profitability and growth, recent mass layoffs, competing for market share with Uber, and the future of autonomous vehicles. #lyft #yahoofinance Don't Miss: Valley of Hype: The Culture That Built Elizabeth Holmes WATCH HERE: • Elizabeth Holmes: 'Valley of Hype' [pre-sh... Subscribe to Yahoo Finance: https://yhoo.it/2fGu5Bb About Yahoo Finance: At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, int...

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About John Zimmer

In a May 2026 podcast appearance, Lyft co-founder John Zimmer discussed the company's early competition with Uber, the impact of the COVID-19 pandemic, and his departure from the company. Zimmer stated that during the pandemic, "80% of the business went away overnight." He described Lyft's competitive position against Uber, saying, "They had raised $3 billion from the Saudi government and we had five months of cash left." Zimmer said the company responded by targeting markets where it had low market share, explaining, "If we subsidized something a dollar or gave a dollar off, they would have to pay $9." Zimmer also reflected on his decision to step down as CEO, saying he and his team were "honest that like that wasn't us" to run the company forever and that David Richer was "the right person for that chapter." He described the company as being "so used to surviving that when we had survived we were still kind of huddled in like almost like a war stance." Zimmer also expressed a vision for reducing car ownership, stating, "We can get rid of car ownership. Redesigning cities around people and not cars. Our cities are designed for cars and that's stupid."

Source: AI-verified profile updated from John Zimmer's recent appearances. Browse all interviews →

Transcript (18 segments)

✨ AI-enhanced transcript with speaker attribution

Reporter0:03

Lyft stock is downshifting after the company posted slowing revenue growth in its latest quarter and missed on rider expectations. Let's get to all things on this quarter and the outlook for the company. Will Lyft co-founder and President John Zimmer. John, always nice to get some time with you. Your message to investors this morning.

John Zimmer0:19

The message is that we just had record revenue, got to an even larger revenue in Q4, got to an adjusted EBITDA record in Q4. The hardest part of our challenges over the last couple years is behind us. We just overtook a really large increase in insurance that was driven by inflation. And so now we have our feet underneath us and ready to execute towards a billion dollars of adjusted EBITDA, which would, once the Street gets more confident in our ability to execute against that, should really take note in the stock.

Reporter0:55

The Street is not confident this morning. And perhaps they're looking through what the rest of the economic and even corporate environment is looking at right now. And I believe it was addressed on your call last night too, even a recession case and the likelihood, the probability of that happening. How are you recession-proofing the business over at Lyft right now?

John Zimmer1:17

I think you're right. I think there's a lot of questions broadly in the economy given the potential or likelihood of heading into a recession. For us specifically, we took the tough decision last week to do a reduction in force that sets us up for that billion dollars in adjusted EBITDA independent of there being a recession. Meaning, in a recession case, if demand was to slow, we would likely see the marketplace equilibrium actually get healthier in certain ways as more people look for earning opportunities on the driver's side, and still have a very strong path with high confidence to hit that billion dollars in adjusted EBITDA.

Reporter1:59

I imagine you come at this from a different perspective given you are the co-founder at Lyft. But when you part ways with that many people that helped build the company, how do you think that's going to change the culture and change what you can do at Lyft over the next 18 months?

John Zimmer2:13

It's very tough. It's painful. As a founder, it's painful for those team members most of all and it's painful for the team members that are here. As a manager, as a leader, as a founder, you never want to have to part ways with that many people. That said, it's our job. It's my responsibility to make those decisions, to be accountable to those decisions, and anything that could have avoided it going forward. We're constantly balancing taking care of the team and building a strong business. So that's part of the job, something that I own. Culturally, we have a very strong culture. We've been through tough times and we're going to bring the team together, talk through the future, and use it as a moment to come together.

Reporter3:04

John, we've talked to you a lot in recent years, since the IPO. And I'm starting to see more notes now on the Street calling out that Lyft is losing market share to your biggest competitor. Do you see that? Have you diagnosed why that might be happening?

John Zimmer3:19

Look, over the last decade, people have always had a narrative about Lyft versus Uber and we've always pushed against those odds. Specific to market share, if you look quarter over quarter, I think there was about one percent movement in market share tied to what we believe were temporary driver incentives or what we saw were temporary driver incentives that Uber put into the market that are no longer there. Since those went away, we have recovered about the same amount of share. So, you know, narratives can be very potent right now in the current market environment. It's something we've faced for many years and we have to put up the numbers to push back against them.

Reporter4:02

When we think about the operating costs per mile for Lyft and how there's been so much investment towards autonomous technology, self-driving, to make sure that those operating costs per mile are actually coming down in the future too, and perhaps being one of the biggest recession resiliency measures that at any point for the business could really provide a better margin. When you think about some of those investments and the innovation there for Lyft, what does that timeline look like at scale as you continue to ramp that up? And even with some of the midterm elections taking place today, does that change that timeline at all when you see any change over in Congress and the people that are going to be approving that regulatory framework as well for autonomous vehicles?

John Zimmer4:47

On margin, again, we guided in Q4 to our top EBITDA that we've ever had. So we don't need to wait for an autonomous future to get good margin for the business and for our investors. That said, of course, we are extremely well set up for an autonomous future. It's incredibly difficult to predict. Everyone, including myself, has gotten the exact timing of autonomous wrong. But it's not a matter of if it will come, it is a matter of when it will come. And when it does come, autonomous vehicles will be rolled out first and commercialized on an existing network because people expect to get a ride 100% of the time, and they can only do that on a network that has both drivers and autonomous vehicles, because autonomous vehicles when they first come out will not have all the capabilities. So I see that playing out in a real way over the next three years. Again, that's hard to predict exact timing and what percent of rides will be covered by AVs, but we're well positioned for that future. In terms of politics, obviously can't predict the full outcome of the elections, but we'll continue to work with policymakers on the right policies for autonomous vehicles.

Reporter5:58

John, within that one billion dollar EBITDA target he called out for 2024, what does Lyft's business look like? Are you in any other services besides ride hailing?

John Zimmer6:09

The billion dollars of adjusted EBITDA accounts for the current businesses that we have today. It doesn't necessitate any new businesses. The primary driver of that billion dollars in adjusted EBITDA is our North American rideshare business.

Reporter6:23

I want to talk about drivers for a second. What are the mechanisms that you're employing right now to really continue to engage drivers?

John Zimmer6:32

Quarter over quarter, we saw the largest increase in active drivers over the last year. So we are seeing drivers come back strongly. It's an incredible earning opportunity. On average, drivers are earning over thirty dollars an hour. So I think it's really the independence where they get to turn on and off work whenever they want, it's the high earnings potential during those hours, and then we're providing more and more transparency. We launched upfront information and upfront earnings in over 70 percent of our rides or markets, which gives the driver information on the price as well as the distance and which route the ride is going on before they even accept that ride.

Reporter7:18

John, before I let you go, have you seen any re-acceleration in active riders this quarter?

John Zimmer7:23

We did send the earnings call in October. We saw all-time booking highs for the company. And on the ride side, which speaks more to what you're asking, six percent month over month growth, which is higher than the month over month growth for that same period in 2019. So in that sense, yes. And we've got more of the quarter to go for us to execute our important point there.

Reporter7:49

Indeed, Lyft co-founder and President John Zimmer, always great to get some time with you. We'll talk to you soon.

John Zimmer7:52

Thank you.